Cryptocurrency Mining For Dummies
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Cryptocurrency Mining For Dummies

Cryptocurrency Mining For Dummies


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About the Book

Find out the essentials of cryptocurrency mining  The cryptocurrency phenomenon has sparked a new opportunity mine for virtual gold, kind of like the prospectors of a couple centuries back. This time around, you need some tech know-how to get into the cryptocurrency mining game.  This book shares the insight of two cryptocurrency insiders as they break down the necessary hardware, software, and strategies to mine Bitcoin, Ethereum, Monero, LiteCoin, and Dash. They also provide insight on how to stay ahead of the curve to maximize your return on investment. Get the tech tools and know-how to start mining Pick the best cryptocurrency to return your investment Apply a sound strategy to stay ahead of the game Find cryptocurrency value at the source  From the basics of cryptocurrency and blockchain to selecting the best currency to mine, this easy-to-access book makes it easy to get started today!

Table of Contents:
Introduction 1 About This Book 1 Foolish Assumptions 2 Icons Used in This Book 2 Beyond the Book 3 Where to Go from Here 3 Part 1: Discovering the Basics of Cryptocurrency 5 Chapter 1: Cryptocurrency Explained 7 A Short History of Digital Dollars 7 First, take the Internet 8 Add credit card confusion 8 Add a dash of David Chaum 9 Result? DigiCash, E-Gold, Millicent, Cybercash, and More 9 The Bitcoin whitepaper 10 Bitcoin: The first blockchain app 11 Who (or what) is Satoshi Nakamoto? 11 What’s the Blockchain? 12 Blockchain around the world — the blockchain network 13 Hashing: “Fingerprinting” blocks 13 Blockchain is “immutable” 14 Where’s the Money? 16 What’s the Crypto in Cryptocurrency? 17 Public Key Encryption Magic 19 Messages to the blockchain 21 Signing messages with the private key 21 The blockchain address — your money’s home 22 Sending a transaction message 22 Unraveling the message 23 The Basic Components of Cryptocurrency 24 What’s in a wallet? 25 Private keys create public keys 25 Public keys create blockchain addresses 25 The private key controls the address 26 Where Does Crypto Come From? The Crypto Mines (Sometimes) 26 Chapter 2: Understanding Cryptocurrency Mining 29 Understanding Decentralized Currencies 29 Exploring the Role of the Crypto Miner 31 Making Cryptocurrency Trustworthy 32 The Byzantine Generals 33 Looking at the Cryptocurrency Miner 35 Making the Crypto World Go ’Round 37 Chapter 3: Building Blocks: The Transaction’s Journey to the Blockchain 39 The Cryptocurrency Network 40 Submitting Transactions 43 Looking at transaction fees 44 Change address 45 Verifying the transaction 46 Competing for bitcoin, the ten-minute contest 47 Winning the Bitcoin 49 Chapter 4: Exploring the Different Forms of Mining 51 Proof of Work Algorithms 51 Proof of Work applications 53 Proof of Work examples 54 Upsides 56 Downsides 56 Proof of Stake Algorithms 57 Proof of Stake explained 58 Proof of Stake selections 60 PoS example cryptocurrencies 61 Upsides 61 Downsides 62 Hybrid Proof of Stake/Proof of Work 63 Hybrids explained 63 Hybridized examples 65 Upsides 66 Downsides 66 Delegated Proof of Stake (dPoS) 67 Delegated Byzantine Fault Tolerance (dBFT) 67 Proof of Burn (PoB) 68 And MORE 69 Part 2: The Evolution of Cryptocurrency Mining 71 Chapter 5: The Evolution of Mining 73 Proof of Work Mining Evolution 74 CPU mining 74 Adoption of GPUs 74 Rise of the FPGAs 75 Dominance and efficiency of ASICs 75 The Days of Solo Mining 77 Pool Mining 78 What is a mining pool? 78 Choosing a pool 79 Pros and cons of pool mining 80 Cloud Mining 81 Pool mining versus cloud mining 81 Pros and cons of cloud mining 82 Chapter 6: The Future of Cryptocurrency Mining 83 Incentivization of Energy Exploration 83 Recovery of otherwise wasted resources 84 Continued Computational Efficiency Improvements 85 Doing more with less 86 Approaching the limits of physics 86 Corporate and Nation State Participation 87 Nation states 87 Corporations 89 Future speculation 89 The Mythical Miner Death Spiral 90 Block difficulty 90 Block difficulty adjustment algorithm 91 Miners of last resort 93 Part 3: Becoming a Cryptocurrency Miner 95 Chapter 7: Mining Made Simple: Finding and Preparing a Pool Account 97 Understanding How Pool Mining Works 98 Choosing a Pool 99 Pools that are good starting points 100 A few of the largest pools 101 Incentives and rewards 103 Pool ideology 105 Pool reputation 106 Pool fees 107 Pool percentage of the total network 108 Setting Up a Pool Account 110 Server choice 110 Mining equipment pool settings 111 Payout addresses 112 Payout thresholds 112 Researching Mining Pools 113 Cloud Mining 114 Working with Honeyminer 115 Chapter 8: Picking a Cryptocurrency to Mine 121 Determining Your Goal 122 Mineable? PoW? PoS? 124 Researching Cryptocurrencies 125 Mining profitability comparison sites 125 Algorithms and cryptocurrencies 129 The cryptocurrency’s details page 136 Mining-profit calculators 138 The cryptocurrency’s home page 139 GitHub 140 The cryptocurrency’s Wikipedia page 141 Mining forums 142 Going Deep 142 Longevity of a cryptocurrency 142 Hash rate and cryptocurrency security 143 Community support 144 Decentralization is a Good Thing 146 It’s an Iterative Process 150 Chapter 9: Gathering Your Mining Gear 151 Selecting the Correct Computational Mining Hardware 151 Specified hash rate 152 Specified power consumption 154 Equipment cost and other considerations 159 Length of time your hardware will be viable 160 Mining Equipment Manufacturers 162 ASIC rig producers 162 GPU rig producers 163 A Wallet to Store and Protect Your Private Keys 163 Types of wallets 164 Securing and backing up your wallet 166 Where to Mine? Selecting a Viable Location 167 Vet your home for cryptocurrency mining 167 Communication requirements 168 Power source thoughts 169 Data centers and other dedicated commercial locations 173 Chapter 10: Setting Up Your Mining Hardware 175 ASIC Mining Rigs 175 Racks 176 Power supply 177 PDUs 179 Network and Ethernet connection 179 A computer to control your rig 180 GPU Mining Rigs 183 Getting your GPU rig online 183 Building your own GPU miner 184 CPU Mining 195 Mining Software 196 Pool mining 196 Solo mining 200 Part 4: The Economics of Mining 203 Chapter 11: Running the Numbers: Is it Worth It? 205 Factors That Determine Mining Profitability 206 Cost of equipment 206 Hash rate of your equipment 208 Mining rig efficiency 211 Cost of maintenance 214 Cost of facilities 215 Cost of electricity 215 Total network hash rate 218 Information about your pool 219 Block earnings 219 Cryptocurrency conversion rate 220 Calculating Your ROI 220 Your block earnings 221 Your expenses 225 Calculating ROI 225 Knowing the unknowns 226 Online profitability calculators 227 Historical estimates 228 Chapter 12: Reducing Negatives and Gaining an Edge 231 Profitability Through Efficiency 232 Upgrading ageing equipment 232 Mining different cryptocurrencies 232 Using exhaust heat 233 Reducing electricity bills 234 Knowledge is Power 236 Why current events are important 237 The “fork wars” 238 Your forking decisions 241 Here Today, Gone Tomorrow 245 Evaluating Your Mining Resources 247 Increasing mining competition 247 Increasing block difficulty 247 Diminishing returns due to halving events 248 Chapter 13: Running Your Cryptocurrency Business 251 What to Do with Your Mined Cryptocurrency 252 Convert your cryptocurrency 252 Buying equipment and paying bills 252 Paying with crypto when you can’t pay with crypto 253 Expand or upgrade your mining operation 255 But don’t forget the tax 255 Hodling your cryptocurrency 256 Invest your cryptocurrency 257 Donate your cryptocurrency to charity 257 Gift your cryptocurrency 258 Determining When to Sell 259 Cryptocurrency market indicators 259 Where to sell: Cryptocurrency exchanges 262 Dollar Cost Averaging 264 Dollar cost averaging your purchases 265 Cost averaging your exits 266 Custodial exchange risk 267 Tax and Your Mining Business 267 But you’re mining, not investing 269 It gets complicated 270 Scaling Up? 271 Do not overextend 271 Milestones to meet before you reinvest 272 Planning your expansion 274 Part 5: The Parts of Ten 275 Chapter 14: Ten or So Tips for When the Market Dips 277 Have a Plan 278 How Long Can You Last? 279 Learn from Market History 281 Don’t Panic! (Keep Calm and Carry On?) 284 Buy the Dip 285 Look for the Advantages 286 Anticipate the Market Recovery 287 Learn From Your First Dip 287 Consider Market Volatility 288 Switch to Another Cryptocurrency 291 Stop Mining! 291 These are simple calculations 293 Stop or go? 294 Chapter 15: Ten Ways to Boost ROI 297 Doing Your Homework 297 Timing Your Entry 298 Playing the Markets 299 Identifying Low Hash Rate Alternative Cryptocurrencies 299 Mining the Start of a Chain 300 Starting Small 302 Scaling Choices 303 Finding Cheap Electricity 303 Cooling Efficiently 305 Scoring Hardware Deals 306 Chapter 16: Ten Types of Cryptocurrency Resources 307 Cryptocurrency Market Trackers 308 Mining Profitability Estimation Tools 308 Cryptocurrency Reddit Pages 308 Blockchain Explorers 309 Data Visualizations 310 Cryptocurrency Data and Statistics 311 Cryptocurrency Wiki’s 311 Lopp.net Resources 312 Cypherpunk Manifesto 312 Cryptocurrency White Papers 312 The Satoshi Nakamoto Institute 313 Chapter 17: Ten Criticisms of Cryptocurrencies and Mining 315 Energy Consumption 316 Wasted Processing 319 Scalability, Transaction Speed, and Throughput 321 Coin Distribution Fairness 323 Market Bubbles and Volatility 323 Centralization 324 Scams and Rip-offs 325 Hardware Price Inflation and Scarcity 326 Fire Hazards 326 Neighbor Complaints 327 Index 329

About the Author :
Peter Kent is a longtime technology author who also created the online course Crypto Clear: Bitcoin & Cryptocurrency Made Simple. Tyler Bain is a professional engineer who specializes on the electrical grid. He is also a Certified Bitcoin Professional who focuses on system resiliency and mining mechanics.


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Product Details
  • ISBN-13: 9781119579298
  • Publisher: John Wiley & Sons Inc
  • Publisher Imprint: For Dummies
  • Height: 231 mm
  • No of Pages: 368
  • Returnable: N
  • Weight: 476 gr
  • ISBN-10: 1119579295
  • Publisher Date: 02 Jan 2020
  • Binding: Paperback
  • Language: English
  • Returnable: N
  • Spine Width: 23 mm
  • Width: 188 mm


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